A comprehensive new study from Germany's Kiel Institute for the World Economy has revealed that American consumers and businesses are bearing nearly the entire burden of U.S. tariffs, contradicting political claims that these trade measures force foreign exporters to pay.
The analysis, based on shipping records covering 25 million individual transactions and approximately $4 trillion in global trade from early 2024 to late 2025, found that American importers are responsible for 96% of the added tariff costs. Foreign exporters have made only minimal price adjustments, choosing instead to maintain their profit margins by reducing shipment volumes to the U.S. market.
The research specifically examined cases involving Brazil and India, both subjected to significant tariff increases in 2025. Brazil faced a 50% duty on certain products, while India experienced tariffs that began at 25% and were later doubled. In both instances, exporters kept their dollar prices stable despite the new tariffs, responding with shipment reductions of 18% to 24% compared to trade flows to other regions like Europe, Canada, and Australia.
"Money didn't flow from overseas sellers into American pockets. Instead, it redirected within the country, from households and local operations toward federal accounts," the report noted. The tariffs have generated approximately $200 billion in revenue, but this sum is effectively being paid by U.S. businesses and households rather than foreign trading partners.
Economist Julian Hinz, involved in the analysis, questioned long-held assumptions about tariff burdens, stating that domestic buyers absorbed nearly all of the tariff income collected over the past year. The study reveals that tariffs function more like a domestic consumption tax than an effective tool for pressuring foreign companies, with the financial impact rippling through supply chains from importers to manufacturers, retailers, and ultimately everyday shoppers.
